The indictment states that Kiddie Kare received $523,148 in reimbursements from a federal food program administered through the Pennsylvania Department of Education.
Prosecutors did not say how much of that total was fraudulently obtained, but the indictment states that Parson used the money "to enrich herself" and that "there were often food shortages at Kiddie Kare locations."
In 2011, Parson filed a suit against Clear Channel Communications Inc. and Jones, alleging that Jones defamed her during a radio broadcast about a purported altercation between groups of girls involving Parson's daughter.
Prosecutors alleged Parson fabricated evidence that her business suffered, that her property was vandalized, and that she received threats of violence.
In July 2012, Clear Channel paid a "substantial sum" to Parson to settle the lawsuit.
The amount is not specified, but prosecutors want Parson to forfeit nearly $1.3 million, which presumably includes the amount she allegedly defrauded from the government and from the Clear Channel settlement.
Parson couldn't be reached for comment. Assistant U.S. Attorney Mary Kay Costello, who is prosecuting the case, said Kiddie Kare is out of business.
Parson was charged with three counts of wire fraud, two counts of conspiracy, one count of mail fraud, and two counts of aiding and abetting. If convicted on all counts, Parson faces a maximum 90 years in prison and a fine of up to $1.5 million.
To read the indictment against Tracey Parson, go to www.inquirer.com/parson